1. NordDRG full version based productivity reporting productivity reporting Jorma Lauharanta Director of Helsinki University Hospital Area Nordic Casemix Conference 2010

2. Meilahti campus Cathedral We are here Olympic stadium

3. Input Resources Output Visits Episodes etc Effectiveness Health gain Productivity = output/input The goal is health gain Jorma Lauharanta No health gain How to increase? How to minimize?

4. Jorma Lauharanta Some rejected Productivity improvement Evaluation of effectiveness Application of treatment methods, health technology Maximal health gain How to maximize health gain? (with moderate costs)

5. Requirements for productivity improvement A. Productivity measurement and monitoring system B. Productivity development programme some important items: 1. improvement of process fluency 2. increase in labour productivity 3. increased efficiency in use of capacity and use of space 4. elimination of overlap, centralisation, and economies of scale 5. new operating models etc.

6. Productivity support in HUCH Long-term productivity development programme created Clinicians/ clinical managers’ accountability increased -> new management system Clinicians receive monthly reports of intermediate product utilization -> intermediate products per DRG group -> product level price-cost reports -> feedback about cost effects of clinical decisions DRG-based productivity reporting

7. Price – cost comparisons

8. 1 2 3 4 5days Costs / day 250 500 750 1000 1250 1500 1750 euros basic care at the ward procedure rtg pathology Accumulation of the patient related costs lab 3 750 euros Sum of intermediate products:

9. inexpensive “trimmed” average DRG cost various total costs per individual patients “untrimmed” average II phase outliers < - 2 SD II phase outliers > +2 SD I phase outliers > +3 SD I phase outliers < - 3 SD Jorma Lauharanta expensive cost per patient Determination of the average DRG cost (-> billing price, DRG weight)

10. outliers - 1 SD = 2 933 euro + 1 SD = 9 286 euro billing price 5 190 euro Cost distribution of DRG 112D PCI w/o myocardial infarction w cc

11. billing price 5 190 euro - 1 SD = 2 933 euro + 1 SD = 9 286 euro outliers Billing distribution of DRG 112D PCI w/o myocardial infarction w cc

12. NordDRG-group cost limits: mean + 2SD lower limit 1 500 € upper limit 4 500 € Mean cost = billing price 3 000 € = outlier total cost/€ Treatment cost vs. surplus/deficit = ”normal process” surplusdeficitno influence Influence on surplus/ deficit Intermediate products vs average process littlesome more much more average Jorma Lauharanta billed using the intermediate cost sum billed using the billing price

13. Productivity measurement

14. Determination of the DRG cost weight Mean cost of the DRG group DRG cost weight = Mean cost of all DRG groups

15. Methodology 1. Production volume 1. Production volume  DRG weight sum = “DRG points” - sum of DRG weight x number of cases for all DRG groups - same definition for outpatient and inpatient care - clinical unit employing “short therapy” instead of an inpatient/classic method receives the same cost weight as from the classic method (when number of cases in a NordDRG-O group is increased) 2. Productivity measures a) Overall productivity  DRG productivity index - calculated as total costs /DRG point sum = “DRG point cost” b) Labour productivity  DRG labour productivity index - calculated as DRG point sum/FTE’s* (person-years) * FTE = Full Time Equivalent (labour input calculated as ”person years” as if all labour input was produced by full time employees) Method decribed in Finn Med J 47/2009,4055-4061

16. Increase in labour productivity 2009 vs 2008 Increase means improved productivity

17. Overall productivity (DRG point cost) change 2009 vs 2008 (deflated*) * Deflated by 1,6 per cent (change in hospital cost index) Descending figure = improved productivity

18. NordDRG-group cost limits: mean + 2SD lower limit 1 500 € upper limit 4 500 € Mean cost 3 000 € = outlier gives one DRG weight! total cost/€ Treatment cost vs. productivity = ”normal process” gives one DRG weight increasingslightly decreasing Influence on productivity Intermediate products vs average process littlesome more much more average Jorma Lauharanta strongly decreasing

19. Improvement of productivity 2000 - 2009 Jorma Lauharanta

20. Overall productivity 1-3 /2010 vs 2009 (not deflated) Descending figure = improved productivity

21. DRG point cost in various clinic groups/ Dpt of Medicine 1-4/ 2010 vs 2009 (not deflated) Ward episodes: Descending figure = improved productivity

22. DRG point cost in various clinics / Inflammation clinic group 1-4/ 2010 vs 2009 (not deflated) (not deflated) Ward episodes: Descending figure = improved productivity

23. DRG point cost per major products / Dermatology clinic 1-4/ 2010 vs 2009 (not deflated)

24. Conclusive remarks

25. Support to productivity improvement -> Productivity (both labour and overall productivity) has shown an improving trend since starting its measurement -> Clinicians’ interest in productivity and process management issues increased -> Long-term productivity improvement programme created Using the present system -> Impact of various arrangements and interventions on productivity can be monitored without a delay -> successive years can more reliably compared despite a continous shift towards ambulatory treatments Benefits from the present productivity measurement system

26. proper clinical coding clinical protocols in active use monitoring objects: -> quality indicators (treatment outcomes, patient satisfaction, complications, readmissions etc.) -> productivity indicators -> process control/ improvement -> staff satisfaction optimization of resource utilization: -> in-patient care, intermediate products and control visits Features of a well-managed clinic